Created on Monday, 07 January 2013
Written by ANNE FLAHERTY,Associated Press

WASHINGTON (AP) — Struggling for the upper hand in the next round of debt talks, Republicans and Democrats this weekend drew lines in the sand they said they'd never cross when it comes to the U.S. debt limit.

The tough talk on the Sunday morning talk shows doesn't bode well for voters who are frustrated by the political gridlock.

"I believe we need to raise the debt ceiling, but if we don't raise it without a plan to get out of debt, all of us should be fired," said Sen. Lindsey Graham, R-S.C.

Last week's deal to avert the combination of end-of-year tax increases and spending cuts known as the "fiscal cliff" held income tax rates steady for 99 percent of Americans but left some other major pieces of business unresolved.

By late February or early March, the Treasury Department will run out of options to cover the nation's debts and could begin defaulting on government loans unless Congress raises the legal borrowing limit, or debt ceiling. Economists warn that a default could trigger a global recession.

Also looming are deep automatic spending cuts expected to take effect at the beginning of March that could further erase fragile gains in the U.S. economy. Then on March 27, the temporary measure that funds government activities expires, and congressional approval will be needed to keep the government running. That's one more chance to fight over spending.

Republicans say they are willing to raise the debt ceiling but insist any increase must be paired with significant savings from Medicare, Medicaid and other government benefit programs. President Barack Obama has said he's willing to consider spending cuts separately but won't bargain over the government's borrowing authority.

"One thing I will not compromise over is whether or not Congress should pay the tab for a bill they've already racked up," Obama said in his weekly radio and Internet address.

House Minority Leader Nancy Pelosi made a similar remark Sunday in insisting the two issues — raising the debt ceiling and reducing spending — shouldn't be coupled.

"Right now we have to pay the bills that have been incurred," Pelosi said. "And if you want to say cut spending for what we do next, fine, but don't tie it to the debt ceiling."

But Senate Republican Leader Mitch McConnell said spending cuts would have to be part of the equation if the proposal was to get any kind of GOP support.

McConnell on Sunday suggested Republicans were prepared to see the nation default on its spending obligations.

"It's a shame we have to use whatever leverage we have in Congress to get the president to deal with the biggest problem confronting our future, and that's our excessive spending,"

Meanwhile, Democrats said further tax increases for the wealthiest Americans were still possible as Congress looks to close the gap between revenues and expenditures. They say Obama has already agreed to significant spending cuts, and that the latest deal only gets the nation to about half of the revenue it needs to resolve the red ink.

"Trust me, there are plenty of things within that tax code — these loopholes where people can park their money in some island offshore and not pay taxes. These are things that need to be closed. We can do that and use the money to reduce the deficit," said Illinois Sen. Dick Durbin, the second-ranking Senate Democrat.

But McConnell bluntly declared that the "tax issue is over" after last week's agreement.

"We don't have this problem because we tax too little; we have it because we spend too much," McConnell said.

McConnell spoke on NBC's "Meet the Press," ABC's "This Week" and CBS' "Face the Nation." Pelosi was on CBS' "Face the Nation." Durbin and Graham appeared on CNN's "State of the Union."